Levi Strauss Soars to 52-Week High—Can Bull Run Outrun Tariffs?

• Levi Strauss (LEVI) surged 11% to $21.895, hitting a new 52-week high of $22.19
• Q2 revenue rose 6% to $1.4B, with full-year guidance upgraded despite 30% China tariffs
• JPMorgan raised price target to $23, citing 'no moderation in business momentum'

The denim giant's stock is on fire after crushing earnings expectations and reaffirming its 'direct-to-consumer' growth strategy. Investors are pricing in resilience against trade headwinds, with options volatility spiking as traders bet on continued momentum.

Strong Earnings and Guidance Uplift Drive Historic Rally
Levi Strauss' stock exploded higher after the company reported a 6% revenue surge to $1.4B in Q2, driven by double-digit growth in its core direct-to-consumer channel. Management raised full-year revenue guidance by 500 basis points to 4.5-5.5% organic growth, despite factoring in $25-30M in tariff-related headwinds. JPMorgan analysts emphasized the brand's ascension to #1 women's denim globally and its 'head-to-toe lifestyle' expansion as key differentiators. The $0.05 EPS upgrade and 140bps gross margin improvement further validated operational discipline, sparking a technical breakout through $22 resistance.

Levi Outshines Struggling Apparel Sector
While Levi's shares hit record highs, the broader Apparel sector (XRL) faces headwinds. Sector leader VF Corp (VFC) slumped 4% today amid slowing growth at The North Face and Vans brands. Levi's success contrasts sharply with peers like American Eagle (AEO) and Gap (GPS), which have warned of tariff pressures and inventory challenges. The company's focus on premium denim and direct consumer engagement appears to be a winning formula in a struggling retail environment.

Bulls Eye Calls Amid Elevated Volatility
Bollinger Bands: Trading above upper band ($20.15) signals aggressive upside momentum
RSI: 77.32 (overbought, but sustainable in trending markets)
MACD: Positive crossover with histogram expanding to 0.12

Bulls should focus on the $22-23 zone. The stock's 30-day support holds at $17.50, but with RSI overextended, a pullback could present buying opportunities. Among options:

1. LEVI20250718C21 (Call, $21 strike):
- Delta: 0.85 (85% price sensitivity)
- Theta: -0.049 (decays $0.05/day)
- Gamma: 0.25 (amplifies gains on moves)
- Leverage: 21.92%
- Ideal for sustained $22+ momentum. Payoff at $23 yields 102% return vs 5% stock rise.

2. LEVI20250815C21 (Call, $21 strike):
- Delta: 0.71 (71% price sensitivity)
- Theta: -0.015 (slow decay)
- Gamma: 0.18 (moderate acceleration)
- Leverage: 16.61%
- Longer-dated alternative with 68% return potential at $23.50.

Trade Alert: Aggressive bulls should buy LEVI20250718C21 if $22.50 resistance holds—this call offers 4x returns relative to stock price gains in a continued breakout.

Backtest Levi Strauss Stock Performance
The backtest of Levi Strauss & Co. (LEVI) after a 11% intraday increase shows favorable short-to-medium-term performance. The 3-Day win rate is 52.42%, the 10-Day win rate is 52.74%, and the 30-Day win rate is 56.45%, indicating a higher probability of positive returns in the immediate aftermath of such a surge. The maximum return during the backtest period was 3.59%, which occurred on day 59 after the intraday increase, suggesting that while the stock tended to rise in the short term, the overall maximum return was relatively modest.

Buy the Denim Surge—but Watch the Tariff Ceiling
Levi's stock is firing on all cylinders, but traders must monitor two critical levels: the $23 JPMorgan target and the $17.30 200-day moving average. While the company's direct-to-consumer strategy and brand strength justify optimism, the sector's 4% decline led by VF Corp (VFC -4%) underscores external risks. Investors should layer into positions below $22.50 while keeping a close eye on tariff developments. If the $23 strike holds, this denim rally could stretch into new territory—otherwise, the 52-week high could become a peak to remember.